Stock Report

Hitachi Energy India Ltd - Rated amount enhanced to Rs. 6000 crore

Posted On : 2022-07-08 22:25:24( TIMEZONE : IST )

Hitachi Energy India Ltd - Rated amount enhanced to Rs. 6000 crore

CRISIL Ratings has reaffirmed its 'CRISIL AAA / Stable / CRISIL A1+' ratings on the bank facilities of Hitachi Energy India Limited (Formerly known as ABB Power Products and Systems India Limited). The Total Bank Loan Facilities Rated has been enhanced from Rs.5000 Crore to Rs.6000 Crore.

The ratings reflect the healthy business risk profile of the company, driven by its strong market position in the power grid segment, diversity in product portfolio and geographical reach, and a strong clientele. It also reflects the robust financial risk profile, as reflected in large networth of Rs 1,099 crore as on March 31, 2022, with no long-term debt, although company had a short-term debt of Rs 125 crore as on March 31,2022. The ratings factor in strong support from the ultimate parent - Hitachi Ltd (Hitachi) (rated 'A/Negative/A-1' by S&P), which holds ~80.1% stake in Hitachi Energy Ltd., which is the holding company of Hitachi Energy India Limited.

On July 14, 2021, S&P resolved the 'Watch Negative' on the ratings of Hitachi Ltd and reaffirmed the long term 'A' and short term 'A-1' rating with a 'Negative' outlook. The rating action by S&P on Hitachi does not impact the outstanding ratings on the company as per CRISIL Ratings' criteria.

Operating income stood at Rs 4,884 crore for the 15 months ended March 2022, while the operating margin was 6.4%. However, performance was impacted during fiscal 2022, on account of macro-economic factors, geopolitical issues, inflationary pressure and supply chain disruption. As a result, the company registered an operating income of Rs 1,113 crore and operating earnings before interest, taxes, depreciation and amortisation (EBITDA) of Rs 66 crore for the quarter ended March 31, 2022.

Despite economic and supply chain disruptions, the company has maintained a strong business risk profile, driven by its established market position and healthy order book of Rs 4,672 crore as on March 31, 2022. Liquidity too is adequate, marked by unencumbered cash equivalent of Rs 86 crore as on March 31, 2022, and access to fund-based bank limit of Rs 849 crore as on May 31, 2022, which remains largely unutilised.

These strengths are partially offset by susceptibility to capital investment cycles and project implementation risk, largely arising from structural issues in the power sector and intense competition in the capital goods industry.

Shares of Hitachi Energy India Limited was last trading in BSE at Rs. 3281.30 as compared to the previous close of Rs. 3339.35. The total number of shares traded during the day was 1221 in over 353 trades.

The stock hit an intraday high of Rs. 3355.25 and intraday low of 3257.70. The net turnover during the day was Rs. 4035677.00.

Source : Equity Bulls


HitachiEnergyIndia INE07Y701011 RatingAmountEnhanced BankFacilities RatingReaffirmed